Repeal Indigenisation Act: Robertson

HARARE – As Zimbabwe hurtles towards more economic problems, leading economist and journalist John Robertson believes President Robert Mugabe’s administration is running out of time to fix the economy.

And with the country’s debt now pegged at $9,9 billion, prospects of relief appear too distant for the scarred economy, which has stubbornly continued to stare the rugged and puffing Zanu PF government in the face.

Robertson, often disparaged by senior Zanu PF officials over his unrestrained criticism of both Mugabe and the liberation movement’s policies, this week told the Daily News that government must bin the Indigenisation and Economic Empowerment Act.

“Investors who are not indigenous are now prevented from even considering further developments because of indigenisation laws,” Robertson said.

“Indigenisation should be driven by an eagerness shown by indigenous Zimbabweans to start new businesses, not a determination to take a controlling interest in any business started by anybody else.

“All talk of indigenisation should be abandoned and the act should be repealed. Indigenisation should become a natural process, the pace of which should be set by revising company registration laws to encourage a much bigger number of Zimbabweans to identify business opportunities and follow through with determination to become the promoters of new businesses.”

The indigenisation and empowerment programme has split opinion, with pro-Zanu PF groups backing the policy while business and pro-democracy groups believe there must be rational implementation.

Among the key arguments raised by groups calling for cautious approach are that government must not apply a “one-size-fits-all” approach and should skew the shareholding thresholds in favour of foreign investors, whose direct investment is needed to kick start dying enterprises.

Zanu PF is weighing up its options following proposals by the business community and interest groups to review the indigenisation policy.

It is yet to finalise its proposed amendments, which could curry favour with foreign investors.

Robertson said the immediate task of government should be the restoration of production in the economy.

“Our major problems stem from measures that caused a sharp decline in productive capacity. We have produced less of just about everything since the land reform programme was launched,” said Robertson.

“Because we produced less, the country no longer earned the export revenues needed to service its debts. Because we produced less, we have had to import more.

“With smaller exports and bigger imports, the money has drained out of the country. We will best clear the debt by increasing exports and that requires increase in production.”

Zimbabwe’s principal debt has ballooned by nearly 40 percent from $6,1 billion last year to $9,9 billion now.

The external debt stood at $8,9 billion as at December 31, 2013, which is 69 percent of Gross Domestic Product (GDP), and the total domestic debt stood at $994m, constituting eight percent of GDP.

Of the total public and publicly-guaranteed external debt of $6,964 billion, $5,012 billion (72 percent) was public debt, while $1,356 billion (20 percent) was publicly-guaranteed debt and $596m (eight percent) was RBZ debt.

Zimbabwe owes various bilateral creditors including the Paris Club and Non-Paris Club lenders such as the African Development Bank (AfDB), the World Bank (WB), the International Monetary Fund (IMF) and the European Investment Bank (EIB), among others.

Despite having established a debt management office, pessimism persists on the back of depressed production.

“The debt management office will achieve nothing if it does not help bring about an increase in production. It cannot negotiate the debt away; we won’t be considered for debt relief until the government stops defending the policies that caused the damage to the productive sectors,” added Robertson.

“To increase production, we need investment capital, but with too little money available for medium to longer-term investment, we need to encourage investment inflows.

Said Robertson: “The IMF’s Staff Monitored Programme is designed to get us onto the right track to a recovery. So far, government has resented and resisted almost all their attempts to steer us towards that track.

“The SMP should be extremely beneficial, but government is unwilling to take the necessary steps.”

An SMP is an informal agreement between Zimbabwe and the IMF to monitor the implementation of the country’s economic programme.

The SMP focuses on putting public finances on a sustainable course, while protecting infrastructure investment and priority social spending, strengthening public financial management, increasing diamond revenue transparency, reducing financial sector vulnerabilities, and restructuring the central bank.

Last week, the IMF said it could extend Zimbabwe’s SMP deadline for the second time as the country has missed a number of targets due to a deteriorating economy.

“…a number of quantitative targets and structural benchmarks were not met,” IMF said in a report.

“A successful conclusion of the third review could pave the way to a successor SMP, which the authorities have indicated they may request, to build on their achievements and support a stronger policy framework.”

The Zanu PF government has been grappling with a myriad of problems, chief among them hard cash for civil servants’ salaries and critical services.

Investors continue to blow their noses on attempts to make them choose Zimbabwe as an alternative investment destination.

They remain suspicious of the Zanu PF government, whose biggest undoing has been making contradictory policy pronouncements, especially on indigenisation.

In the absence of meaningful investment and cash inflows, Zimbabwe Revenue Authority (Zimra) has stepped up its revenue collection, albeit in controversial circumstances, to shore up bare treasury coffers.

“Government’s desperation for money has prompted Zimra’s aggressive behaviour. This has already reduced the number of taxpaying companies as some have been rendered bankrupt by the confiscation of bank balances,” noted Robertson.

“The issues most in need of attention are:

The collateral value of land should be restored by putting farmland back into the market.

With a market value, the land could be used as security for bank loans and farmed more productively.

Zimbabwe could restore food self-sufficiency and begin to restore manufacturing capacity and a favourable Balance of Payments.

Job creation would improve, but to bring about rapid employment growth, the labour laws should be made much more acceptable to investors.”

Sadly childish comments from “Public Protector” are typical of the standard of many of the population in Zimbabwe.
“Indigenisation should be driven by an eagerness shown by indigenous Zimbabweans to start new businesses, not a determination to take a controlling interest in any business started by anybody else” This is the Zimbabwe today, idiots that are unable to create or produce, rather they take and destroy.

Robertson is a realist and I think his comments are the most logical if Zimbabwe has any chance of econminic recovery. Indiginization and Nationlization are so archaic and backward that these policies only appeal to the clowns at ZanuPF. Globalization is entrenched these days and capital can flow freely where it finds a decent return. No one in their right mind would invest in Zimbabwe where 51% is tsken without compensation. Very soon Zanu PF will realize that there is nothing left to loot but by then the economy will be in free fall.

Zimbabwe has become another failed African State as predicted and I do not think it will ever have a strong economy again, the infrastructure is to far gone and most of Zimbabwe,s tradesman, farmers and professionals have left and most will never return, it has been to long now.

and there was a country called Zimbabbwe which had the best economy not until poor policies where imposed the economy shrunk.ROBERTSON is right we had the worst economy its enough to chase away investors worse indenisation ,you start your own business someone from nowhere comes and gets total control 51 percent ,why even bother investing in Zimbabwe then.Byee investors welcome poverty

Well said Mscynic……..
Suspect publicprotector is in fact a Zanupf protector……
Certainly is not protecting the public…..
Robertson has it exactly correct…….until the foolish Indigenisation laws are gone Zim has no hope of getting back on its economic feet……..

a number of indicators show that the government seems intent on killing the people of Zimbabwe by systematic deprivation. These people are aware that the country is on a precipice. They are trying to negotiate a rescue package, but their negotiation tactics are illogical, brazen and they negotiate as if they are on the better side. Yes we have mineral and agricultural land, but they need capital to be realised. Unless I am no longer in my right senses basic principles of negaotiation when you are at par with your opposite number are ”win-win”. Now ZANU pF govt has worsened and compromised its bargaining position and as time goes on and thing worsen the bargaining position is eroded in the short to medium term. Indeginisation is a good policy is done in good faith and involving all stakeholders, not as an election propaganda tool as now. The fruits of the wrath are there for all to countenance. We have an unreasonable and recalcitrant government which seems to be existing in the stone age and has a winner take all mentality typical of the liberation era.What is obvious is that the only way to go forward is to De-escalate and negotiate logically. All adversarial tactics with verbose war rhetoric such as ‘War cabinet’ (may its soul rest in peace”…..’hondo yeminda, aka jambanja’ (may the land audit result in removal of multiple farm grabbing and promote equitable distribution of land regardless of political affiliation). These primitive betrayal tactics have got us nowhere as we continue to sink in quick sand as potential rescuers watch with satisfaction.Obviously they are waiting to see your experiment to its end. Repeal indigenisation, re-introduce the rule of law, re-align the vital parts of the constitution first and FAST, apologize for political violence to the nation……or QUIT humbly. WE are going to be reduced to Argentina of the 1990s or Germany of 1929 or worse Zimbabwe of 2008. Now that the Chinese have refused…what now? Zimbabwe has an educated population but the govt does not like the educated who can see betrayal and lies and purports to depend on the rural population – our parents and brothers who depend on our handouts. They are poor and desperate. It the can get a scud of chibuku the vote ‘gratefully’. I saw it in 2002. Ignorant youths and prisoners realeased on amnesty towards elections are a ripe
tool of ‘uncivilized’ violent attack on the very same rural populace. These tactics are humiliating and retrogressive in the modern world. IN ANY CASE WE TALK TO DEAF PEOPLE AND WE KNOW THEY NEVER LISTEN> We look for alternative livelihoods outside the circus and keep our families alive and well and watch to see the GRAND FINALE OF OUR ECONOMY!!!!!!!!!!!!

What is the public protector smoking?
ZPF has failed. What ever new policy they bring won t change anything. They failed in land reform now they are failing on indigenisation. Simple economics say such programmes are processes not events, to gain political mileage. Where are the two million jobs?

Anyone who has ever been in business of any sort knows that the problem lies squarely with ZPF. Part of this is due to the socialist indoctrination they received in China, Russia, N Korea so many years ago.

ZPF are Control Freaks and rabid racists as well. The land grab was the most stupid and destructive action EVER. But, having stolen the farms and got away with it they are now trying to steal all the businesses.

Robertson is absolutely right. There are so many people wanting to invest in Zim, but under present condition they just laugh and walk away saying NO WAY.

Of course local business enterprise should be encouraged, but a “local” is a citizen OF ANY RACE. Stealing going businesses is destructive and stupid and does not grow the economy.

The Land Grab was an excercise is racially motivated theft. No one in their right mind would object to more people getting into agriculture and GROWING the whole sector. It should always be “As well as” and not “Instead of”, but it seems Zimbos will never learn

Until discussion focuses on ideas and their elegance and sustainability or lack thereof; and not on personal attacks and needless caricatures, it is nothing but froth. … Aim for a more mature discussion that can convince and inspire hope. …